Why is it important for a corporation to maintain the confidence of the stockholder?
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Words: 470
Pages: 2
(approximately 235 words/page)
Pages: 2
(approximately 235 words/page)
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Retaining the confidence of the stockholders is important in the effect that the market
value of the stock has on the corporation. Stock and the value of the corporate stock
does not necessarily provide the corporation with income. It provides the corporation
with capital. In turn, Capital becomes cash and collateral. The better the market value
of the stock, because of high stockholder cofidence, the more a corporation is able to
barter and trade in
showed first 75 words of 470 total
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showed first 75 words of 470 total
showed last 75 words of 470 total
I think that when shareholders lose confidence and stock prices drop then the ability to raise capital declines. Stock prices drop, the amount of money they can borrow decreases, interest rates increase. The general public tends to lose confidence in the company also. When the general public loses confidence in the product or the service a corporation is providing business slows down, revenue decreases, layoffs happen. The ability to stay in business becomes increasingly harder.
I think that when shareholders lose confidence and stock prices drop then the ability to raise capital declines. Stock prices drop, the amount of money they can borrow decreases, interest rates increase. The general public tends to lose confidence in the company also. When the general public loses confidence in the product or the service a corporation is providing business slows down, revenue decreases, layoffs happen. The ability to stay in business becomes increasingly harder.